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6 Ways ASCs Must Evolve to Meet Billing Challenges

Billing and coding operations at ambulatory surgery centers are rapidly changing. ASCs may need to evaluate and update certain practices to stay relevant, compliant and profitable.

Michael Lipomi is the president and chief executive officer of Surgical Management Professionals in Sioux Falls, S.D. He works with ASCs to improve their business operations.

Here are six ways ASC can improve their revenue cycle operations to flourish.

1. Educate patients on financial responsibility. Some facilities still choose not to discuss financial arrangements with patients prior to the day of surgery. As a result, these ASCs may have a high number of accounts receivable days, largely driven by unfulfilled patient responsibility portions, especially in the first quarter of the year when patients have not yet met their deductibles. As deductibles and co-pays continue to increase, ASCs must devise new financial approaches, Mr. Lipomi says.

Centers need to display near the front office appropriate information to inform patients of policies for their payments. This can be done sensitively, without appearing too materialistic or demanding, he says.

"If a patient comes in to have a $1,500 procedure, and they have a $1,000 deductible, we want to know they are going to be responsible for that part of the bill," Mr. Lipomi says. "Ask them how they are going to pay or what portion they can provide at the time of service. Work with them."

Patients are up to 50 percent more likely to pay their portion of the bill if they are educated and asked to make payment arrangements prior to surgery.

While patient collection is not a new problem for ASCs, some co-pays and deductibles are significantly higher than they used to be, and insurance policies are becoming more convoluted.

"People often forget about their deductible," he says. "They may have a 20 percent co-pay and think they will owe $300 for a $1,500 procedure, when really they will owe $1,100 with the co-pay and deductible."

2. Only use implants or hardware with proper reimbursement. Before adding procedures that require costly implants or hardware, surgery centers need to count the cost of implants against the cost of the procedure. They could be losing money on these procedures, Mr. Lipomi says.

A solution could be carving out implants in a managed care contract. However, some centers still won't be able to provide the same service a nearby hospital could perform at a much lower cost because of generic purchasing agreements. "It's critical that they find out the costs and make sure they know what they are doing," he says. "It is a cautionary area."

3. Conduct regular coding audits. SMP is performing more coding audits now than ever before, Mr. Lipomi says, largely because of the growing penalties for improperly coding or billing claims. While improperly coding could result in a center losing out on due revenue, over billing is the more pressing problem in centers today.

Mr. Lipomi worked with a center that was unknowingly billing a bad code, which resulted in the ASC receiving about $500 more per case than they were entitled. "We caught it fairly early on," he says, "but they had to write about a $50,000 check. If they hadn't caught the problem for a year or two while incurring fees, then that could've been devastating."

Frequent coding audits will help ASCs make sure they are accurately billing procedures and abiding by ever-changing regulations.

"How do you stay abreast with all of these changes?" Mr. Lipomi says. "You have to hire well-educated, highly-trained individuals that have a lot of time on their hands to track this. Going to the annual state association meeting just doesn't cut it any longer. Things change so rapidly."

Smaller centers or those struggling to keep up with changes should consider hiring a consultant or management company with a reputation for being knowledgeable about reforms. As the industry becomes more regulated and complicated, it's not worth risking your business by shortcutting payroll staff, consulting or management, he says.

5. Stay on top of accounts receivable. Keeping accounts receivable days within a strict parameter could save an ASC from stunted cash flow. Often, centers will be making money but have cash flow issues because claims are tied up in A/R for too many days. Adding personnel to the revenue cycle department or figuring out how to tackle claims more quickly can help A/R days drop dramatically, Mr. Lipomi says.

6. Get physicians involved in coding. Physicians need to get involved in the coding process to understand how to appropriately chart their patient encounters. Some physicians who were not trained to be fiscally conscious will balk at learning from coders, but gone are the days where missed codes do not impact an ASC's bottom line, Mr. Lipomi says.

"Physicians in the office and surgery center must be charting the same codes," he says. "If a physician is doing something and not noting it in the operative report, we can't bill for it. It may be a procedure in addition to what they are coding that he or she does not chart."

It's critical for physicians to understand what they get paid for and what they do not. If a physician has two equal options for patient care, then the surgeon needs to know what the best option is for reimbursement.

"If you want to continue to provide service, then you are going to have to get enough reimbursement to pay for the services you are performing," he says. "When there's an option that is equal as far as care and better for reimbursement, they need to know that's an option."